ECONOMICS
INCOME DISTRIBUTION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Relative poverty
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Absolute poverty
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Either A or B
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None of the above
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Detailed explanation-1: -In 2020/21, around one in five people in the UK (20%) were in poverty – 13.4 million people. Of these, 7.9 million were working-age adults, 3.9 million were children and 1.7 million were pensioners. Therefore, one in four children in the UK are living in poverty (27%).
Detailed explanation-2: -This formed the basis for the first dollar-a-day international poverty line. The IPL of $1.90, which was used until fall 2022, was derived as the mean of the national poverty lines of 15 poor countries in the 1990s, expressed in 2011 PPPs. The selection of these 15 poor countries was based on limited data at the time.
Detailed explanation-3: -Housing costs include rent and mortgage interest payments. Households are in low income if they live on less than 60% of the median income. Median income (before housing costs) was just under £30, 000 for a couple with no children in the period from January 2019 to December 2020.
Detailed explanation-4: -Poverty Thresholds: Measure of Need Thresholds vary by the size of the family and age of the members. The same thresholds are used throughout the United States (they do not vary geographically). Thresholds are updated annually for inflation using the Consumer Price Index for All Urban Consumers (CPI-U).